The consequences of the Central Bank's proposals to restrict mortgage lending will be "far more far reaching than many realise", PIBA, the Professional Insurance Brokers Association, warned today.

Speaking at the organisation's annual industry awards ceremony, Rachel Doyle, chief operations officer warned about the impact of the Central Bank's proposal which would see the majority of mortgage applicants required to come up with a 20 per cent deposit for a mortgage.

“It will impact young people’s ability to make any other contribution towards their financial future, including prudent pension planning, quite apart from using up, at a very early stage, tax free family inheritances.”

She said international practice would indicate that high loan to value curbs should be used to limit extreme peaks in house prices and housing credit cycles. “They should not be an ongoing feature of a market but rather used short-term to cool an overheating market. We are very far off that now,” she said.

And she said the way in which the Central Bank consultation document is framed, "leads one to become suspicious, despite recent indications from the Governor, that the regulations are already drafted and are, in fact, a fait accompli."

“One would have to wonder if the motivating factor here has more to do with a sense of self preservation on the part of regulators deeply sensitive to criticisms of past failures. If so, this is hardly a way for any country to allow its policy be shaped,” Ms Doyle said, adding that if the 20 per cent deposit requirement remains, “there will be serious and pervasive consequences”.